Details of Norwich marina deal hazy

Thursday

Norwich’s proposed purchase of the Marina at American Wharf for $675,000 has residents asking why the hurry and whether buying the site is in the best interest of the community.

Norwich’s proposed purchase of the Marina at American Wharf for $675,000 has residents asking why the hurry and whether buying the site is in the best interest of the community.

In the 24 years since the late Ron Aliano, marina developer and owner of American Ambulance, entered into a 1987 development contract with the city, the profit derived from the project has been minimal at best.

Mayor Peter Nystrom maintains that keeping the marina should be considered a linchpin to the future redevelopment of downtown.

“This is an important part of our plan for the city,” he said. “I think it can be turned around.”

The particulars on what exactly is for sale have many confused. Since the land is owned by the city, residents at a recent meeting wanted to know what they are buying: The docks, outbuildings and marina equipment, but would the Surf & Turf Cafe and unused business buildings also be purchased with city money? The cafe, assessed at $131,000, and other buildings assessed at $1.5 million, generate about $48,000 in property taxes to the city.

Nystrom said it was something best figured out by attorneys, but he leaned toward the idea the buildings already belonged to the city because they were not movable.

City Attorney Michael Driscoll agreed, at least in theory.

“What’s called a fixture is something that is sufficiently affixed to the land that it is considered part of it,” Driscoll said. “The docks, the piers (and) the floating docks can be argued.”

According to Driscoll, who said his office would like more time to work through the complexities of the proposed sale, the Aliano estate is pushing for a more rapid resolution — perhaps before June.

“It’s important that there not be a hiatus,” he said. “It’s more difficult to restart a business if you let it stop.”

Although profit statements from the American Wharf Development Corp., or the Aliano family, are not available, the amount of income generated and paid to the city has been less than expected, Nystrom said.

Former Alderman Walter Way, who said he was the lone vote against developing the marina in the 1980s, said the project has failed to live up to expectations.
“The city has been paying for this since it started,” Way said. “It’s time we stop paying.”
Way said the idea that the marina would revitalize the downtown was always a dream.
“I’ve never seen anything come up that river but a coal barge,” he said. “I never saw it as any type of machine of commerce.”

In the original 99-year contract signed by Aliano and City Manager M. Dale Cunningham, the payback for the city was seen in the long-term view. The base rent for the property on the southern portion of Hollyhock Island, was set at only $1 for years one through five, then increased in years six through 39 to $5,000. A balloon-type payment of $230,000 was scheduled for the 40th year.

Although not explained in the contract, years 41-99 reverted back to the original $1 yearly base rent.

As part of the contract, Aliano was expected to make certain enhancements to the property on a four-phase schedule. In phase one, the construction of the marina, public space, and certain ancillary improvements were to happen. This was to be followed with the construction of a café, pavilion and a pool. Both phases were expected to be substantially completed within five years of the start of the agreement. The developer was expected to spend about $700,000.

In phases three and four, Aliano was expected to add either a restaurant or office building, or both, to the property before the 40th anniversary of the agreement.
City Attorney Michael Driscoll said he considered the first two phases completed, and third somewhat so.

The main mortgage on the property is owned by People’s Bank. The exact amount of the mortgage was unknown, but Driscoll estimated it could be as low as $400,000, or as high as $500,000.

At a price of $675,000, the Aliano estate will benefit little from the sale, essentially walking away with no gain after 16 years in the marina business.

Way, however, said the city already has given Aliano more than $500,000 to help with the redevelopment of the marina, and should simply take possession.

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